PERSONAL SPECIAL...Look! there is a treasure in your hand

Look!  There is a treasure in your hand

Your hobbies and interests can double up as alternative investments. Seven possibilities highlighted

Have the yo-yoing markets and economic uncertainties left you, the investor, in a tizzy? Are you constantly scouting for alternative investments? Here is a list of seven ‘passion investments’ that can help you follow your interests and hobbies, and, in the bargain, earn a fortune. Before you dive in, a word of caution though. These are strictly aptitude-led investment options. Jumping into any of them just for financial gains may prove foolhardy. The stamp of profit Philately has been a hobby for many but for a few others, it has turned out to be a way to amass a neat little fortune. A cursory Google search for prices at which a few collector’s stamps sold in the past will tell you how paying a hobby philately can be. “Stamps with errors have always been in great demand. One such example is the 1854 four anna bicolor stamp with the head of the queen printed upside down. It is also known as the ‘Inverted Head’. The Stanley Gibbons catalogue value for this stamp was £250 in 1941, £5,000 in 1975 and £200,000 last year. A copy of this stamp was sold by a famous USA auction firm for $65,000 in 2009 and a similar copy was sold for approximately $350,000 by a stamp dealer just a year later in 2010,” says Sandeep Jaiswal, president, Stamps Inc, a US-based philatelic company. The reason why such stamps command high prices is because only 21 copies of this variety are known to be in private hands. So, like other collectibles, rarity is a big price determinant. Apart from this, other factors are the demand for a particular stamp category in the market and the condition of the stamp. An interested investor can source the stamps from exhibitions, auctions or from private dealers. But you will have to set aside a huge fortune if you wish to collect rare stamps.   Signature gains The autograph that you managed to secure from a celebrity on the sidelines of an event or at a chance meeting may be worth more than you know. For instance, an autograph of Mahatma Gandhi has been valued over `7 lakh at auctions. The more well known the personality is the higher the returns. Another factor that controls the value in this category is the frequency with which the celebrity gives autographs. So, if there are fewer autographs of a celebrity available, then it can fetch higher returns. Apart from autographs, even a rare photograph (or a collection of photographs) is highly valued. If the celebrity whose autograph or photograph that has been documented is no longer alive, then the value of the collectible increases manifolds. Painting profits This collectors’ market thrives on works by famous painters (though post-2008 collectors have been applying brakes on this investment option). But the price of $120 million that Edvard Munch’s iconic painting ‘The Scream’ commanded, has given artists and auction houses reasons to believe that the marketing is warming up again. The fact that Indian market has few collectors augments one’s chance of commanding a higher price. Works of well-known names such as M F Hussain, S H Raza and Tyeb Mehta are handpicked at high prices. A series of paintings or one done at a particular time by a painter is generally sold at a premium. A painting can be sourced either from a private collector, art galleries or from auction houses. However, every investor should be cautious of the parallel replica art market as some can even fool connoisseurs. Sound of money A rare coin can be worth more than what you probably estimated it to be. Sample this: a `50,000 bank note of 1960 is valued upward of `7 lakh. Or a one rupee Nehru silver coin from 1957 is worth `2 lakh! If demand for a coin is more than the supply, then you can get a numismatist – student or collector of coins -- to open his purse string wider. Else, proof sets or the ones that are uncirculated and issued especially for the Indian mint or private collectors command a princely sum. “However, a rare coin or a bank note may be worth nothing if it is not in a good condition. That is why, a coin scores over bank notes in a collector’s list as they are easier to maintain,” says Muneesh Kumar, a private coin collector. Booking profit A win-win hobby is one that is enjoyable as well as profitable. Avid readers (and book-buyers) who may have bought antiquarian books and newspapers by chance would testify to that. Factors that dictate the value of a book are many: demand-supply mismatch, fan following of the author or the book itself, its condition and the year of edition. The value of first-edition books of Jane Austen’s Pride and Prejudice and collection of poems by Keats has shot up by over a whopping 450% and 150%, respectively, in ten years. Generally, a first-edition book commands more money. In order to determine the edition of the book, you can look up its ISBN (International Standard Book Number). This number is unique to every book and sites such as biblio.com and abebooks.com have features that allow you to check the ISBN number. Whisking in profits The thin line between indulgence and investment is increasingly getting blurred. As a result, investors are queuing up to make old whiskey bottles a part of their portfolio. The investors have been in high spirits with the increase in value. For instance, the value of a vintage Maccallan 1938 or a Dallmore 1936 has appreciated by over 400% in just three years. The brewery and the brand are amongst the most important factors that regulate the price of a bottle. Apart from these, any ‘limited edition’ whiskey will turn out to be liquid gold. Or, any bottle from a famous but defunct distillery will likely command a high price. The Scotland variety of whiskey has always been and still continues to be a hit among investors in the whiskey market. However, before you bet on a bottle, remember that at least a passing knowledge and a genuine interest are a must-have for such investments. l A liquid investment A bottle of a rich, old, full-bodied wine can give you handsome returns. Many investors are now turning their focus from just sipping wine to actually investing in it. The wine market is more mature outside India where there are specialist funds, investment firms and advisory companies dedicated solely to investing in wine. For investment purposes, you can either buy bottles or invest in wine funds outside India. These funds work like any other funds where they pool money from investors and then invest accordingly. The value of wine mainly depends on its age, year of manufacturing, region of its origin and its storage condition. Subhash Arora, an investor and the founder of Delhi Wines Society, cautions that “only 1% of the total wine present in the world is of investible quality”. So, “it may be difficult for a novice to decide what exactly to bet on”. He recommends that novice investors back their baby steps up with a cautious outlook, which will be a “balanced approach”. Keep in mind Before you jump on the ‘rare collectibles as alternative investment’ bandwagon, you need to keep in mind that these are long-term investments. Typically, a 5- or 10-year period is required before value builds. Risks are that the market is not regulated; and there are very few authentic grading agencies. A thumb rule that is applicable to all investment categories is that before you decide to sell off your private collection, you must get it valued by more than two dealers to get a fair idea of its value. It is always advisable to go to a reputed and licensed dealer. There are a few dealers who also offer a money-back guarantee and they are clearly worth the consultation fee that you will cough up for their advice. Beginners can also tap social networking sites to connect with other dealers. The world of alternative investments is replete with counterfeits. A single such investment can burn a hole in your pocket. So make sure you tread with caution. Good luck!

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